Jarmo I Suominen | Professor of Mass Customization | UIAH ...€¦ · this way, they will choose...

Jarmo I Suominen | Professor of Mass Customization | UIAH | All Rights Reserved 2007

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T-86.5300 Information and Communication Technology Enabled Commerce Helsinki University of Technology - Spring 2008

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Jarmo I Suominen Professor of Mass Customization, UIAH | MIT


Service innovation

Customer experience designJarmo I SuominenProfessor of Mass CustomizationUIAH | MIT

19.03.07:001


Service innovation

Service experience (design) (channel independent customer experience)Business Model (develop)(within effective value networks)Enabling technologies (choose)(eg. masscustomization)


Demand [rational]


Desire [emotional]


Customer Experience

Usually the effectiveness of

services are measured channel

by channel vertically. However the

Promises and Expectations

developed trough advertising are

redeemed already in the customer

interaction process. Current multi

channel models are incapable of

supporting cross channel behavior.

1980’s competition was based on quality factors

1990’s emphasized emotional factors

2000’s the differentiating factor is customer experience


Interaction Channels

New communication channels and means have caused demand

towards newkind of marketing; blogs, wom,

mobile, communitiesThere are more than enough

information about TOM, preference and share

of voice figures. Value of creative work is usually evaluated

trough thesenumbers versus investment to

creative work and media investment while

sales figures are guiding everything.


Customer interaction channels are developed

in independent silos.

Multi channel customers are 25% more profitable than

single channel usersMost profitable path at the moment is ordering online and picking up from store

Multi channel customers focus more on convenience, less

on the price tagMulti channel customers are

less loyalCompetition is only one ”click”

away

Aberdeen Group 2004 Forrester Research 2005

Customer Experience Management

Sales process


Interaction/purchase process

Customers don't behave this way, they will choose their own

paths duringthe customer journey.

Users don´t behave this way. They choose

preferred channel for each phase of the

interaction flow.

Customer experience design requires

understanding of the interaction process

from customer point of view, from sales to purchase process



Drivers; customer motivation

Activation: What initiates interest and makes people move, Were customers self activated or

activated by advertising?Browsing: How and in which

channels customers browse for products, services and options,

Comparability?Confirming: Suitability? How people

want to configure options if they do, what they are looking for ?

Deciding: Value for money? What are the key defined factors thatmake

a deal win or lose. How is it done; in advertising or in face to

face contact.Purchasing: Where customers sign

for an agreement. Value for Money? How did the delivery

went?



Design Drivers

activation phase

browsing phase

configuration phase

desicion phase

purchasing phase

Are the desings in relation to my needs?

Dominated by WoM, Blogs, Price runners

Could I browse based on my priorities?

Using internet as the first touchpoint

Commitment phase, could this be suitable for me?

Face to face is important

Financing phase, value for money?

I need to think about this!

What about the product?

Finally the user experience


Modularization19.03.07:010 1.COMPONENT SHARING MODULARITY

Common technology/service module for different contexts

2.COMPONENT SWAPPING MODULARITYCommon context for technology/servicemodules

3.CUT-TO-FIT MODULARITYCommon technology/service modules for adjustable platforms

4.BUS MODULARITYCommon platform for technology/service and context modules

5.SECTIONAL MODULARITYOpen interfaces between technology/serviceand context modules


Mass Customization model

From dynamic manufacturing

processes and static end products to

static manufacturing processes and

dynamic end products



second (third …) order

improvement and fine tuning of configuration

customer feedback, reaction

fulfillment of individual order

continuous optimization

storage of customer data and

configuration

(first) configuration

of product or service

Customer Innovation

Optimized experience

Applicable business model

Enabling technologies

Intelligent ROI


MassClusivity

Emerging trends

Traditional luxury

Premium

Commodity

Alternative

Mass ClassStandard

New luxury

Prestige

Mass Luxury

Luxury²

MassClusivity


Community of individuals


Community of IndividualsClear brand identity will come from the integrator (like

developer)Customers will start by selecting the characteristic of an

apartment in relation with suitable size (single, couple, family, extended family etc,) then following to define the series (entry, modest, basic, expensive, luxurious etc.) They are then guided to select specific model with suitable specifications which later on could be refined and personalized trough various but suitable options.

01. Select Body (size)02. Select Series (prize range)03. Select Model (lifestyle)04. Select Options (personalize)

Options will let customers to personalize their desired model

Models are grouped to seriesSeries are using standardized bodies


case


Key issues in the residentialreal estate market

Customer service is not a key priority for an agent

There is a conflict of interest between the seller and

the agent (high price for the seller, quick deal for

the agent even though working on a

commission basis)

There exists an opportunity for a new,

customer-oriented property agent

There is plenty of supply for apartments, but it is still difficult to find the home of your dreams

The importance of the internet in residential real estate transactions has increased dramatically in recent years but the current website solutions do not truly meet the needs of the buyers

Real estate agents are compensated almost or entirely on commission, hence the most important task for an agent is to seek sale agreements and sell quickly

In many markets, like in Finland, the agency price level appears to be artificially high and there seems to be no real price competition between the key players

Nevertheless, people generally do trust the real estate agents and let them take care of the sale of their most valued asset, their home, usually for a high fee


Igglo services the buyer and the seller at an early stageof the sales process

Byers and seller meet at the Igglo site

Helps keen buyers to find their dream home

Makes selling pleasant, effortless and

inexpensiveBrings efficiency to the

sales processInternet match and

efficient Contact Centre doubles the

sales volume per agent

Less advertising, less fixed costs

Time

Silent purchase / sale

transaction in Igglo

Traditional real estate

contact

“Fever”Traditional real estate transaction


Igglo model

By innovative use of the internet and an efficient contact centre Igglo can produce an outstanding

customer experience and rationalize the real estate

sales process to an extent that gives Igglo a crushing

price advantage on the market.


New company to RE markets

Rationale;

There is plenty of supply for apartments, but it is still difficult to find the home of customer dreams.

The importance of the internet in residential real estate transactions has increased dramatically in recent years but the current website solutions do not truly meet the needs of the buyersReal estate agents are compensated almost or entirely on commission, hence the most important task for an agent is to seek sale agreements and sell quickly.

There is a conflict of interest between the seller and the agent (high price for the seller, quick deal for the agent even though working on a commission basis)


Multi channel Real estate broker

Browsing phase; 93 % were browsing potentials in WEB

Confirming phase; 68 % were asking additional info F2F

Activation phase; 57 % were activated by change in their needs

Decision phase; 92 % wanted to do the deal F2F

37 %

93 %

92 %

68 % 77 %

15 %79 %

13 % 33 %

PRINT F2F WWW

57 %28 %


Current Flow

Browsing phase;

Demand for F2F

Confirming phase;

Eating the resources of sales staff

Activation phase; Big decision emotionally and economically.

Decision phase;

Broker support crucial.

66 % 18 %

14 %20 %

15 % 06 %

56 %

54 %

PRINT F2F WWW

79 %

57 %28 %

37 %

93 %

92 %

77 %

15 %79 %

13 % 33 %

68 %


Continuous flow of hot leads

Browsing phase; Design Driver > silent selling/buying

Confirming phase; Design Driver > feeling of security.

Activation phase; Design Driver > variety

Decision phase; Design Driver > new service concept

NEW FLOW

PRINT F2F WWW


mass fusion


case


Case broadband

Rationale; Broadband markets were developing and maturing rapidly in 2004, gaining market share was crucial.

ObjectivesGaining the market share. Identifying the main differentiators from customer point of view and locate the current barriers in sales process.

Product: B2C Broadband connection


Barriers for closing the deals

OE Browsing phase; 66 % were browsing 3 potentials in WEB

OE Confirming phase; 56 % were asking additional info from CC

OE Activation phase; 69 % were activated by Ads

OE Decision phase; 79 % went to store to close the deal in F2F

56 %

66 %

79 %

26 % 18 %

14 %20 %

15 % 06 %

CC F2F WWW

69 %

ADS


Current Flow

OE Browsing phase; Supportive / understandable information

What speed matches my needs? How fast do I get the product?

OE Confirming phase; Detailed information about purchase

Customer’s wanted once more discuss about the delivery process

OE Activation phase; New Advertising/selling line:

How to make the decision which brands are potential or relevant

OE Decision phase; Support in stores

Customer’s felt too unsecure to buy online.

26 % 18 %

14 %20 %

15 % 06 %

56 %

69 %

66 %

ADS

CC F2F WWW

79 %


Enabling the major path

OE Browsing phase; Design Driver > easiness

Browsing tools for independent buyers. 24 h Call Back.

OE Confirming phase; Design Driver > clear decision making

Set up of a separate CC call back unit. To assure and sell.

OE Activation phase; Design Driver > understandable promice

The easiest and quickest way to buy reliable broadband.”

OE Decision phase; Design Driver > support the decision

Info and sell functions were separated. Selling process is shorter.

CC F2F WWW


Major Path

RetailInternet Voice

Purchasing79%

Browsing74%

Confirming56%

Activation66%

AD WWW W2M


learnings...

Mass Customization menu


Clear Identity

Lettuce

Bread

Cheese

Tomato

Beef

Hamburger ModelIdentified brandPredictable options

French fries & soda


Cross Channel

Bread

Lettuce

Fondue ModelRefining the product

Cheese

Tomato

Beef


Simultanious

Layer of pasta

Filling

Layer of pasta

FillingLayer of pasta

Lasagna ModelSimultaniousprocessesIndependent layers


Modular

Modular solutions

Dynamic endproduct

Service tray


Customers don’t wantchoices; they just wantexactly what they want

(Joseph B. Pine III)

Thank [email protected]

Jarmo I Suominen | Professor of Mass Customization | UIAH ...€¦ · this way, they will choose...

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